The Biden administration has finalized regulations aimed at preventing American investors from supporting the development of advanced technology, including artificial intelligence (AI), in China.
The U.S. Treasury Department on Monday finalized a rule that stemmed from an August 2023 executive order issued by President Biden that aims to restrict “countries of concern,” specifically China, including Hong Kong and Macao, from accessing American investments in developing technologies.
The rule, which will come into effect on January 2, applies to three core technology areas: semiconductors and microelectronics, quantum information technologies, and specific AI systems, according to Reuters.
The department identified these “narrow set of technologies [as] core to the next generation of military, cybersecurity, surveillance, and intelligence applications.”
Paul Rosen, assistant Treasury secretary for investment security, stated, “U.S. investments … must not be used to help countries of concern develop their military, intelligence and cyber capabilities.”
This measure seeks to prevent Beijing from acquiring American expertise as this “cutting-edge technology” continues to advance in fields such as AI and “code-breaking computer systems.”
The overall goal is to prevent this sophisticated technology from falling into the hands of the Chinese military.
However, these measures could also “close off markets for some of our tech companies and venture capitalists,” explained Phil Siegel, founder of an AI nonprofit, the Center for Advanced Preparedness and Threat Response Simulation (CAPTRS).
While U.S. companies will primarily be responsible for ensuring compliance with these new regulations concerning tech development in China, Siegel believes they are unlikely to have significant negative consequences in the short term.
“Until we understand how this technology might be used by our adversaries, it probably is best to stay the course,” Siegel told Digital. “The question to ask is does slowing them down have more value than keeping an eye on what they do with these new technologies.”
The AI expert noted that these steps to prevent China from gaining access to U.S. technology development also mean Washington could lose potential visibility into the progress of Beijing’s AI advancements.
China has once again condemned the U.S.’s latest efforts to counter its AI development, and the foreign ministry has lodged a protest with Washington.
“China strongly deplores and firmly opposes the U.S. rolling out restrictions on investment in China,” said Foreign Ministry spokesperson Lin Jian on Tuesday during a daily press briefing.
Reuters contributed to this report.